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UK property prices down slightly between June and July, says latest index
Residential property prices in the UK fell slightly by 0.6% between June and July and annual house price growth has slowed to 7.9%, according to the latest monthly index from the Halifax. It shows the fragility of the housing market recovery as different lenders show prices rising and falling, but only by marginal amounts so there is some stability in the housing market. Just a few days the Nationwide reported in its monthly index data that prices increased by 0.4% in July and annual property price growth edged up to 3.5%. Meanwhile one set of data said that prime property prices in central London are still falling and another showed a slight rise. Both the Halifax and the Nationwide show that the average home price is now nudging £200,000. Today’s data from the Halifax put it at £198,883. The Halifax index also shows that sales increased by 5% between May and June. Confidence in the outlook for house price growth remains substantially higher than at the beginning of 2015, according to Stephen Noakes, managing director of retail customer products at the Halifax. He believes that the market is robust, pointing out that house prices in the three months to July were 2.4% higher than in the previous quarter. However, this measure of the underlying rate of house price growth has eased and annual house price growth also declined, to 7.9% from 9.6% in June and is at its lowest since December 2014. ‘The underlying pace of house price growth remains robust notwithstanding the easing in July. Continuing economic recovery, earnings growth in excess of consumer price inflation and very low mortgage rates all underpin housing demand,’ said Noakes. ‘Supply is highly restricted with the stock of homes available for sale falling further to new record lows. This combination of well supported demand and tight supply is likely to ensure that house price growth remains relatively strong in the near term,’ he added. He also pointed out that the Halifax housing market confidence tracker shows that confidence in the outlook for house price growth hit its highest level in four years following the general election in May, but dropped back in June. Price Optimism (HPO) hit +68 in May 2015, and although it slipped back slightly in June to +64, it remains substantially higher than at the beginning of 2015 when it was +52. Jonathan Samuels, chief executive of Dragonfly Property Finance, pointed out that despite the fall in prices during July, house prices overall are still rising. ‘The dominant narrative within the UK property market continues to be weak supply and strong demand,’ he said. He explained that demand is strong because of mortgage rates being at record lows, more people in work, low inflation and a generally positive economic outlook, however, the increasing likelihood of an interest rate rise in the not too distant future has the potential to recalibrate demand and the market as a whole. ‘After so many years of 0.5% rates, even a… Continue reading
New home permissions reach record in NZ but not enough to meet housing shortfall
Planning permission for new homes in New Zealand in the first half of 2015 was higher than any previous year, new data shows, but not enough to match current shortfall. Between January and June 2015 some12,057 new dwellings, worth almost $4 billion, were consented, according to the figures from Statistics New Zealand. The new building consent figures show the total floor area for the new homes was 221 hectares, enough to cover an area twice the size of Wellington Airport. In the month of June some 2,042 new dwellings were consented nationally, up 2% compared with June 2014. However, in seasonally adjusted terms, the number was down 4.1% from May 2015. Numbers in Auckland increased by 18% but in Canterbury consents decreased by 13%. ‘New dwelling consents growth this month was led by Auckland, which offset the fall in Canterbury,’ said business indicators manager Clara Eatherley. The data also shows that the total value of consents for all buildings in June 2015 was $1.3 billion, comprising $832 million for residential buildings and $454 million for non-residential buildings. However the number of new homes being built in Auckland continues to fall well short of what is required to meet the region's population growth. It is estimated that 13,000 new homes a year are needed in Auckland just to keep pace with current population growth, which is an average of 1,083 consents a month. That means that current consents were just under two thirds of what is required and the supply of new homes will need to increase by around 50% from current levels before demand and supply start to get back into any sort of equilibrium. A new report suggests that Auckland's housing shortage might not peak for another three years and could last for more than a decade. According to the Auckland Council's Housing Project Office (HPO) the shortfall could rise rapidly to 25,000 homes in 2018, compared to current levels of roughly 15,000. The HPO looked at the rate of population change, the number of dwellings required, and the likely rate of consenting to estimate how many homes would need to be built between over the next 15 years. Officials said consent numbers were continuing to increase and it was not unrealistic to assume Auckland could get to 12,000 dwelling consents a year by 2021 and if 90% of consented dwellings were built, Auckland's shortfall could be eliminated by 2027. Recently the Productivity Commission put the current shortfall at 32,000 homes and said 13,000 homes would be needed each year to accommodate new growth. Continue reading
Property title fraud costing millions in England and Wales
Property title fraud is costing the Land Registry in England and Wales millions a year despite diligent efforts to combat fraud in real estate transactions, new research shows. Almost £10 million worth of compensation claims, at an average value of £168,900 per claim, were received by the Land Registry last year alone because of fraud or forgery, according to new data Obtained through a series of Freedom of Information. The data, requested on behalf of title insurance and property risk solutions provider Titlesolv, also shows that an overall total of £23.3 million worth of claims were received in 2014 and since the start of 2012, the Land Registry Indemnity Fund has received more than £59 million in claims and paid out more than £31 million against them. According to the data, the Land Registry has settled or paid an increasing number of the claims it receives, rising from some 78% of the claims lodged in 2012 to more than 86% in 2014. However, the actual proportion of the value of claims granted has dropped considerably over the same time period, from an average of about 80% in 2012 to just under 36% in 2014. In England and Wales, it is the responsibility of the Land Registry to check the veracity of an owners’ claim to a property when a title is registered, with mortgage lenders then using its records as one of the criteria for approving mortgage applications to check a criminal has not stolen an owner’s identity and is attempting to raise an unenforceable mortgage against a property. In recent years, the Land Registry has made progress in bolstering its governance, processes and records to defend against claims, however the number of claims remains stubbornly stagnant, the costs of which have to be shouldered by its Indemnity Fund. ‘Despite best efforts, significant amounts of money continue to be lost each and every year due to fraud and forgery of property title deeds, with the Land Registry bearing the brunt of these costs. This is not likely to change anytime soon as many of the issues created pre-recession still lie dormant,’ said Chris Taylor, chief executive of Titlesolv. ‘If interest rates go up, and more mortgages fall into arrears, the registry is likely to face another wave of claims as defaults tend to reveal or highlight allegations of fraud. If those mortgages become unenforceable, the registry and the public purse, are vulnerable to claims of negligence,’ he explained. He also pointed out that fraud is not something that can be easily detected, so ultimately the responsibility falls on all parties, the Land Registry, solicitors and mortgage lenders alike , to be as vigilant as possible and to collaborate even more to detect the signs earlier. ‘Ultimately, however, the principle of a State Guarantee on property titles places liability for title fraud squarely with the Land Registry, so it is clearly in its own… Continue reading
